The Northern Powerhouse Investment Fund II is helping smaller businesses secure finance that might otherwise have been unavailable or delayed, according to an independent early evaluation published by the British Business Bank on 13 October.
The assessment, undertaken by research company SQW, examined the performance of the regional investment programme and its role in addressing gaps in access to funding. It found evidence that the fund is operating broadly as intended and supporting companies seeking to invest, innovate and expand.
By September 2025, NPIF II had invested £115m through 324 individual investments involving 306 businesses across the North. Those figures describe the period measured by the evaluation and are not new money allocated on the publication date. The British Business Bank separately reported that more recent programme activity had grown since the evaluation’s cut-off.
Allocations and retrospective programme evaluations measure different things. A release announcing a fresh commitment records capital allocated for future deployment; an evaluation examines finance already provided and whether it generated benefits that would otherwise have been unlikely.
NPIF II is one of six Nations and Regions investment funds established to improve the availability of finance outside established capital centres. Across the six funds, £294m had been invested through 951 transactions involving 877 businesses by September 2025, attracting £233m in additional private investment.
The wider evaluation reported that 81% of surveyed recipient businesses believed they would either have been unable to obtain the funding without the programme, or would have received less finance or faced a longer wait. That measure reflects reported additionality among the survey respondents and should not be interpreted as proof that every investment produced the same result.
The programme is intended to fill gaps faced by viable businesses whose funding needs do not align readily with conventional bank finance or major venture capital funds. Some companies seek relatively modest amounts for product development, recruitment, market entry or acquisitions. Others operate in regions where fewer specialist investors have a sustained presence.
Investment finance can determine whether a smaller company is able to recruit staff, purchase equipment or develop new products while remaining in the area where it began trading. Delays or a lack of suitable funding may force projects to be reduced, postponed or financed on terms that are unsuitable for the business’s stage of growth.
The evaluation found that information and communication businesses formed the largest funded sector group in the North, with 47 recipients. Professional, scientific and technical activities followed with 42 businesses, while manufacturing accounted for 41. The distribution reflects the varied business base of the regions covered by the programme rather than a single industry target.
Regional investment funds often aim to attract private capital alongside public funding. This can increase the total available to a company, although the degree of private participation varies by product, transaction and stage of development. An investment commitment may also bring business advice and introductions that are harder to measure than its cash value.
The British Business Bank highlighted ScrubMarine, a Cumbria-based robotics developer, as an example of a beneficiary that has used early investment to advance its prototype, expand engineering capacity and prepare commercial pilots. Individual examples can illustrate how support is used, but they do not replace the need for evidence across the full portfolio.
The study assessed a programme in its early stages, using records and survey responses for a period ending in September 2025. The British Business Bank has subsequently reported further deployment, but later lending and equity activity cannot be assumed to have the same outcomes as those documented in this evaluation. Evidence of additionality also differs from evidence of eventual financial returns.
The evaluation records early evidence that targeted capital is reaching businesses with limited alternatives, but it cannot yet establish the full economic return over the lifetime of NPIF II. Employment gains, business survival and wider regional effects will require subsequent measurement as investments mature.
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